Ibovespa Posts Best Weekly Gain in 10 Months as Usiminas Surges

July 26 (Bloomberg) -- The Ibovespa posted its best weekly
gain in 10 months as Usinas Siderurgicas de Minas Gerais SA led
a rally in Brazilian steelmakers after its quarterly earnings
exceeded analysts’ estimates, outweighing a drop in banks.

Cia. Siderurgica Nacional SA, the country’s third-biggest
steelmaker by output, rose the most since November. Banco
Bradesco SA dropped to a one-week low as financial institutions
tumbled on mounting speculation that credit growth in Brazil is
slowing.

The Ibovespa gained 0.7 percent to 49,422.05 at the close
of trading in Sao Paulo, extending this week’s gain to 4.3
percent, the most since Sept. 14. Thirty-eight stocks advanced
on the measure today while 28 declined. The real weakened 0.6
percent to 2.2571 per dollar at 5:31 p.m. local time.

Usiminas soared 15 percent to 9 reais after posting
adjusted earnings before interest, taxes, depreciation and
amortization of 441 million reais, more than the 388.8 million
average estimate of six analysts surveyed by Bloomberg.

“Usiminas reported earnings that were way better than
expected, which could be a sign that the industry may be
benefiting from a weaker currency, which makes steel exports
more competitive,” Luis Gustavo Pereira, an analyst at Futura
Corretora brokerage, said by phone from Sao Paulo.

Banks Decline

Bradesco dropped 1.9 percent to 28.29 reais as the MSCI
Brazil/Financials index sank a third day to a one-week low.
State-run lender Banco do Brasil SA lost 0.4 percent to 22.49
reais.

Itau Unibanco Holding SA is expected to cut forecasts for
credit growth this year as a cooling economy curbs demand for
loans from Latin America’s two biggest banks, according to
analyst reports. The lender, which in April said new loans would
increase as much as 14 percent this year, will probably say
credit expanded as little as 8.5 percent when it reports second-quarter results on July 30, analysts at Banco Safra SA said in a
note last week.

Bradesco this week lowered its estimate to between 11
percent and 15 percent from a range of 13 percent to 17 percent.

Brazil’s benchmark equity gauge slumped 19 percent this
year through yesterday, wiping out $227 billion from the value
of Brazilian equities, according to data compiled by Bloomberg.
The Ibovespa trades at 12.5 times analysts’ earnings estimates
for the next four quarters, compared with 10.4 for the MSCI
Emerging Markets Index of 21 developing nations’ equities.

Trading volume for stocks in Sao Paulo was 5.08 billion
reais today, according to data compiled by Bloomberg. That
compares with a daily average of 7.7 billion reais this year
through July 24, according to data compiled by the exchange.